A market research company and client of All Digital Rewards has been investing large amounts of capital into loyalty rewards programs and projects. The company is seeking to become more competitive and efficient, while still cutting costs as much as possible. The client has two programs running. Their first program includes a number of different programs and projects which provide incentive rewards to the company’s panelists via a point-based mixed reward marketplace. The company’s second program uses cash and cash-like rewards as the incentives for their panelists. The second program has the highest cost and is the larger of the two programs.
The second program has its end users typically engaging between one and five times per month. In exchange for completing tasks, the users are offered a sum of money each time in the form of a cash equivalent such as prepaid cards (physical and digital) and checks. The second program's users are becoming habitual in their choices of rewards every time they participate, and typically they use their reward funds for daily expenses and bills.
The primary challenge is to find where product savings can be applied by evaluating how rewards are distributed and the costs associated with each program’s products. To determine what will present the best method to drive retention & behavior, and also decrease costs, games are introduced into the incentive programs. Both scenarios can be examined with the game variable taken into account.
The solution for this client is to move their users from the cash program to the points-based program.
To begin implementing the solution and avoiding disruption of the user experience, a single point of integration (SSO) is connected to the client’s existing system asset. Technology microservices are enabled to populate a reward marketplace with demographic-specific incentive products. In order to have the changes come across as enhancements from the user’s perspective, the cash-based products remain available to the program respondents. Instant win drawings are added as another product grouping - this provides the client with reporting and real-time analytics so that they can make survey and incentive program adjustments quickly, while also giving users with a chance to win popular branded merchandise to burn off and reduce point liability.
Panelists are now able to bank their points, which results in participants having a broader range of products to spend their points are, and the users start setting goals in order to earn higher value rewards. Instead of doing x, y, and z to earn a reward, they can earn points by completing x, y, and z but get bonus points for completing them by X time frame.
There is approximately a 26% difference in cost between the cash-based program and points-based program, which are results ADR has consistently seen with several clients in different situations. Clients who move to blended-reward programs have an expected savings of nearly 21%, even when the majority of users have been indoctrinated in cash. These savings projections don’t include transaction costs savings as well as extending retention and active engagements while lowering enrollment costs.
In the case of our market research client, the point-based program with an open series of incentives proved to be significantly more cost effective. By providing direction as to what incentives are presented to the end user, the client experienced cost savings in gamification, product costs, product transactions, and of course, management and required staffing to manage. The addition of gamification, while very enjoyable to the end user, also allowed for participants to use normally unspent points or pins, which had a large impact on the company’s liability.
Our client saw over 20% in savings from all the various program changes implemented. The first improvement in this case study was an almost 7% savings as a result of including targeted products as a cash alternative. An additional 14% in savings was added as a result of gamification.
Programs with games and open selection can expect, on average between 24%-28% better cost outlay per person when compared to a cash-based incentive program.
- Data Collection
- Questionnaire Design